Rate-pegging could be a disservice to ratepayers, Mayor

Rate-pegging of NSW councils could ultimately act as a disservice to ratepayers by discouraging local government from investing in their communities, Cowra Mayor, Councillor Bill West said.

This follows announcement that the Independent Pricing and Regulatory Tribunal (IPART) has capped all NSW council's rate-increases to 1.5 per cent for 2017/18. This increase will be incorporated into the preparation of Cowra Council's draft 2017/18 Budget.

"This one size-fits-all approach to rate increases may offer the illusion of fairness, but the truth is that cost–pressures on rural and regionally-based councils are far more than for larger cities," Cr West explained.

"Rate-capping was introduced to halt what were portrayed as unreasonable rate increases in some areas, but ultimately councils are answerable to their ratepayers and they should be the final arbiter of the financial welfare of their communities," Cr West said.

"Country councils also do not have the additional revenue streams like many city-based councils enjoy to off-set the impact of this rate-pegging, a recent report found that while our large cities are booming, many areas of rural Australia are in recession," Cr West said.

IPART's ruling that councils can only increase rate income by 1.5% has been made despite the fact there has been an increase of 2.3% in employee benefits and on-costs, an increase of 2.7% in non-residential building construction costs.

"While Cowra Council was found to be 'fit for the future' under the recent State Government review of local government, this does not mean that we are not asked to get by in an increasingly-straitened financial position," Cr West said.

"The rate peg fails to recognise the ongoing squeeze on councils that comes from the combination of rate-pegging and cost-shifting, and deteriorating financial support from other levels of government. The reality is that rates have not kept pace with the cost of services and infrastructure that local government in country NSW is expected to deliver," Cr West said.